South Korea’s Industrial Output Rises 2.3% In November

Fifty-thousand-won notes are piled up after being counted at a bank in Seoul. Photo: Reuters

South Korea’s industrial output rose in November compared to that in the previous month, continuing the period of expansion for the last two months, indicating that there is hope that the country’s economy is reviving in spite of the soft global demand.

According to the data released Friday by the Korea National Statistical Office, industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, rose 2.3 percent in November from a 0.7 percent increase in October on a seasonally adjusted basis.

The industrial output rose 2.9 percent in November compared to that in the same month last year, from a 0.8 percent decrease in October.

This report comes after the Bank of Korea (BoK) earlier this month announced its decision to keep the policy rate at 2.75 percent, withstanding the pressure from the market participants for additional stimulus measures to give a boost to the country's weakening economy. In October, the BoK cut the policy rate by 25 basis points to 2.75 percent.

The central bank has noted that the growth in the U.S. has lost momentum and that the euro zone economy is contracting, with weaker exports to the major economies in turn bringing a slower growth in the emerging Asian economy this year. At the same time, the BoK is expecting the economic slowdown to ease and the country’s economy to improve moderately.

The revised data released by the BoK earlier this month showed that South Korea's economic growth slowed to 0.1 percent in the third quarter of this year compared to that in the previous quarter, weighed down by the faltering global economy and the intensifying debt crisis in the euro zone. The economy expanded 0.3 percent in the second quarter while it rose 0.9 percent in the first quarter.

Market players sense that the monetary policy should be loosened again sooner rather than later though the BoK has shown a preference for moving slowly. There should be room for further policy loosening since South Korea posted an inflation rate of 1.6 percent in November which is below the central bank's 3.0 percent target and down from 2.1 percent in October.